1. Field of the Invention
The present invention relates generally to planning systems, and more particularly to a system and method for planning a portfolio of new products to be developed.
2. Description of the Prior Art
In today's marketplace, development of new products to be brought to market is becoming of increasing importance. In many industries, product life cycles are becoming shorter, increasing the importance of new product planning and introduction. Planning of new products is usually based upon a decision by management as to what new products will sell the best, and hopefully provide the best profit margins for the company.
It is difficult for a company to determine whether it is selecting the best mix of new products to be developed. Because of shorter lifetimes, the development process itself must be carefully planned so that new products can be brought out in a timely manner. Bringing out new products too late can have a devastating impact on a company's profit margin.
Previously, there did not exist adequate tools to assist corporate management in planning and defining a proper portfolio of new products to be developed. Most companies know what current products are doing well, and which are contributing to the corporate profits, but have less knowledge about which new products under consideration will best contribute to profits in the future.
Planning systems can be used to plan for product development and allocate resources. However, the impact on profits of developing different possible combinations of new products is generally unknown. Because timing considerations can have such a great impact on overall profitability of a new product, timing of its introduction is of primary concern. Present planning tools available to corporate planners do not allow the impact on future profits to be determined for different scenarios for introducing new products.
It would be desirable to provide a system and method for planning development of new products that could consider the impact of product development on product profitability. It would be further desirable for such a system to enable planners to determine a cost of product development as well as impact on future profits.